Thursday, 11 April 2013

Bitcoin

In the past month, triggered by the events in Cyprus, almost every financial analyst published an article about the Bitcoin bubble. Then yesterday it burst (CNET, CNN), at least that's what seemed to happen: the rate dropped from $266 to $105. But that wasn't the end of the story, now it is back to $180. One explanation is that Bitcoin entered the return to "normal" phase:

However I have another theory. The Bitcoin market is not regulated by FSA or any other authority. It is incredibly easy to make manipulating transactions on this market. Given that the value of all outstanding Bitcoins is worth something between less than $1billion and $3billion (depending on the current rate) such transactions can be made by the investments of just some hundred million dollars. I am sure that with such a small and non-regulated market the Bitcoin rate is just a toy for a small group of speculators. A very profitable toy.